Most financial experts in the market advise people to enter a life insurance policy when they are young and healthy. The cost of insurance is extremely cheap for people entering the cover at a young age. Moreover, most companies in the market do not require any medical examination till a particular age. Another significant factor to be considered here is that the premium charged at the time of entry will remain the same over the years irrespective of one’s age. All these factors make it highly beneficial for a person to take a life insurance policy at a young age.
There are situations wherein a person suffering from certain illnesses may also seek life insurance coverage. In case of terminal illnesses, most life insurers in the market refrain from providing any kind of coverage. If the condition is treatable or manageable, there will not be any problems in getting life insurance coverage. Most people get standard rates when they apply for life insurance. However, people with pre-existing conditions may have to pay a little extra if they wish to have a comprehensive life insurance cover. This is mainly because the risk is higher for insurers providing coverage for people with health issues.
Conditions for which coverage is not provided
People who have the following conditions are excluded by almost all life insurance companies in the market:
Cancer: Cancer is considered to be one of the deadliest diseases in the world. Due to the high mortality rate among cancer patients, life insurance companies do not provide any cover for people with this condition. This is one of the reasons why industry experts encourage people to sign up for life insurance as early as possible. Moreover, if an individual has a family history of cancer, it is always better to have a critical illness cover or a cancer-specific cover along with a term plan. Even for people who have survived cancer, most insurers refrain from providing life insurance coverage.
HIV/AIDS: This is another deadly disease for which there is no cure yet. Hence, almost all life insurers in the market refrain from providing coverage for people with HIV or AIDS. With the advancement in medical technology, the life expectancy of AIDS patients has increased significantly. However, this does not qualify them to get a life insurance cover.
Other terminal conditions: People who have terminal conditions such as kidney failure, liver failure, stroke, etc., are not covered by life insurers. Similar to the above mentioned conditions, the risk factor here is way too high. Hence, it is impossible for these patients to get coverage from any life insurer.
Life insurers cannot deny any claims related to death caused by cancer or other terminal conditions for an existing policyholder. However, they may not sell covers for people who already have these conditions. Life insurance companies expect applicants to declare their existing conditions while signing up for a policy. For high-value covers and entry age over 45 years, most companies require mandatory medical examination before providing coverage. If the above-mentioned conditions are diagnosed during the examination, the company will not provide any coverage to those applicants.
Conditions that affect premiums
As noted earlier, people who have health issues may have to shell out more in premiums when buying a new life insurance policy. There is no standard metric to calculate the increase in premium amount for people with existing conditions. The premium calculations may differ from one insurer to another based on the severity of a specific condition. People who suffer from the following conditions are likely to spend more on their health insurance premiums:
Diabetes: People who suffer from diabetes automatically fall under the high-risk category. The age at which one gets diagnosed with diabetes also plays a major role in premium calculation. Also, there are different types of diabetes (Type 1 or Type 2) common among people in India. This will also have a significant impact on the cost of a life insurance policy. Another major factor to be considered here is that diabetes is often accompanied by other conditions like obesity, blood pressure, cardiac ailments, etc. An insurer is likely to take this into consideration before determining the premium.
Heart disease: Heart disease is very common among middle-aged and older adults in India. Based on the severity of the heart condition, the premium is set for a life insurance policy. People who have survived heart attack may find it extremely difficult to get insurance coverage in the market. This also applies to people who have undergone bypass surgeries.
High blood pressure: The chances of blood pressure increase as people age. The medical examinations required by most life insurers have tests for blood pressure. While this is not a life-threatening disease, it could have a significant impact on the premium of a life insurance policy.
Obesity: Obesity is not an ailment by itself. However, it is something that attracts various health issues such as cardiac problems, blood pressure, kidney ailments, arthritis, diabetes, etc. It is possible to get a life insurance cover even when a person is obese. However, if the BMI is over a certain level, most companies will require a thorough medical examination for various related ailments.
High cholesterol: This is another condition that is becoming common among people in India. High cholesterol is highly risky in the sense that it may lead to other diseases such as heart attacks, stroke, blood pressure, diabetes, etc. If the cholesterol level of a person is over a certain limit during medical checkup, the premium amount is likely to go up significantly.
Kidney ailments: Certain types of kidney diseases are considered life threatening by various insurers in the market. Even if the severity is low, it may still attract a higher charge from the insurer.
The conditions listed here are some of the common ailments for which a health insurer may deny coverage or charge higher premiums. As noted, there is no specific standard when it comes to calculating higher premiums for a policy. Hence, it is better to get quotes from multiple life insurers in the market if you are suffering from a specific condition. Based on the price quote offered, you may choose a life insurance cover that meets your requirements.